Taiwan Legal Update: Amendments to the Factory Management Act & Taiwan-France FinTech Agreement

WEEKY NEWS PICTURE (TW)

Taiwan Legal Update: Amendments to the Factory Management Act & Taiwan-France FinTech Agreement

The Ministry of Economic Affairs predicts Factory Law will Boost Investment by approx. NT$2 Trillion

On the 27th of June, the Legislative Yuan passed amendments to the Factory Management Act. In a statement on Tuesday(15th), the Ministry of Economic Affairs(MOEA) anticipates in ten years, the new amendments will create up to NT$2 trillion (US$ 64.52 Billion) in investment and the number of registered factories will reach 45,000.

The new amendments provide a path to legality for unregistered factories. Unlicensed low pollution factories have a two-year time frame to submit a proposal to the MOEA. This proposal must be aimed at improving pollution and strengthen safety within three years. The factories will then be considered « special factories ».   Complementary rules to provide further guidance are to be introduced by the MOEA later this year.

It is also hoped that the amendments will solve problems arising from illegal factories. The MOEA expressed that many factories « hidden in the countryside » are « invisible champions » of Taiwanese Industry and have enormous potential to contribute to the economy.  Thus, through management and guidance, these factories will be able to make a bigger contribution to the economy.

It is estimated that there are 38,000 unregistered factories in Taiwan; 14000 hectares of farmland nationwide and 7,000 factories with temporary operational licenses. Some unlicensed factories in Taiwan, such as REPON, are well known and visible in the market. Each is expected to invest NT$30 million-NT$50 million over the next ten years, which amounts to 1 to 2 trillion investment.

The amendments will ensure plants are better managed and improve working conditions and safety standards across Taiwan.  They will also provide a path to legality, which is expected to encourage more investment, particularly from key market players who are already operating in the market.

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Taiwan and France ink fintech agreement to boost technology cooperation

The FSC has concluded its negotiations regarding the FinTech cooperation agreement. The agreement was signed by the Financial Supervisory Commission of Taiwan and French Prudential Supervision Regulation Authority of France, on July 9th. This marks the third agreement between the FSC  agreement with a foreign party since 2017, following Poland and U.S Arizona.

Under the framework, Taiwan and France will share information with each other about their respective fintech institutions, services, and commercial opportunities. This will help secure a footing for both sides in a new era of fintech innovation.  The agreement includes a referral mechanism which enables information sharing between supervisory agencies of both parties. After signing, the two parties will be able to refer financial technology start-ups to each other through mutual financial technology departments.

Providing assistance to understand the regulatory systems in both jurisdictions and sharing information on their respective market and financial services innovations will promote mutual supervision of financial technology and create more opportunities for financial technology players in Taiwan and France. This is also expected boost both France and Taiwan’s involvement in the international market.

FSC has also expressed their long-term desire to push for collaboration on financial regulation with Germany and the U.K. Taiwan and Germany have established presences in banking and insurance on each other’s territories. Furthermore, Taiwan is expected to engage in talks with the UK about implementing measures as the country braces for Brexit.

The Financial Management Association will bolster these efforts by promoting exchanges with financial supervision institutions of various countries on financial supervision and financial science and technology cooperation, promote the integration of Taiwan’s financial regulations with international standards, and enhance the international competitiveness of Taiwan’s financial industry.

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